BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1742


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          Date of Hearing:   March 29, 2016


                        ASSEMBLY COMMITTEE ON HUMAN SERVICES


                                Susan Bonilla, Chair


          AB 1742  
          (Mark Stone) - As Introduced February 1, 2016


          SUBJECT:  CalWORKs:  eligibility


          SUMMARY:  Increases the time limit for cash aid to adults  
          through the California Work Opportunity and Responsibility to  
          Kids (CalWORKs) program from 48 months to 60 months and  
          increases the CalWORKs earned income disregard to support  
          employment.

          Specifically, this bill:





          1)Increases the time limit on aid for CalWORKs recipient parents  
            and caretaker relatives from a cumulative total of 48 months  
            to 60 months, thereby aligning with federal time limits for  
            the federal Temporary Assistance for Needy Families (TANF)  
            program.



          2)Increases the amount of income disregarded when calculating  
            CalWORKs eligibility and aid amounts from $225 plus 50% of the  
            remaining earned income to $450 and 70% of the remaining  








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            earned income, as specified.

          3)Makes conforming changes to other statutory provisions that  
            include the current 48-month CalWORKs time limit and provides  
            that no appropriation shall be made to implement the  
            provisions of this bill.



          EXISTING LAW: 



          1)Establishes under federal law the Temporary Assistance for  
            Needy Families (TANF) program to provide aid and  
            welfare-to-work services to eligible families and, in  
            California, provides that TANF funds for welfare-to-work  
            services are administered through the CalWORKs program.  (42  
            U.S.C. 601 et seq., WIC 11200 et seq.) 



          2)Establishes income, asset and real property limits used to  
            determine eligibility for the program, including net income  
            below the Maximum Aid Payment (MAP), based on family size and  
            county of residence, which is around 40% of the Federal  
            Poverty Level.  (WIC 11150 to 11160, 11450 et seq.)

          3)Establishes a 48-month lifetime limit of CalWORKs benefits for  
            eligible adults, including 24 months during which a recipient  
            must meet federal work requirements in order to retain  
            eligibility.  (WIC 11454, 11322.85)

          4)Requires all individuals over 16 years of age, unless they are  
            otherwise exempt, to participate in welfare-to-work activities  
            as a condition of eligibility for CalWORKs.  (WIC 11320.3,  
            11322.6)

          5)Establishes the number of weekly hours of welfare-to-work  








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            participation necessary to remain eligible for aid, including  
            requirements for an unemployed parent in a two-parent  
            assistance unit, as specified.  (WIC 11322.8)


          6)Defines disability-based unearned income, within the CalWORKs  
            program, as state disability insurance benefits, private  
            disability insurance benefits, temporary workers' compensation  
            benefits, social security disability benefits, and any  
            veteran's disability compensation.  (WIC 11451.5)


          7)Defines earned income as gross income received as wages,  
            salary, employer-provided sick leave benefits, commissions, or  
            profits from activities such as a business enterprise or  
            farming in which the recipient is engaged as a self-employed  
            individual or as an employee.  (WIC 11451.5)


          8)Exempts the following when calculating a family's income for  
            the purpose of determining CalWORKs eligibility: 
           

              If the family's disability-based unearned income does not  
            exceed $225


              a)   All disability-based unearned income, plus any amount of  
               not otherwise exempt earned income equal to the amount of  
               the difference between the amount of disability-based  
               unearned income and $225.  
                 
             b)   Fifty percent of all not otherwise exempt earned income  
               in excess of the amount applied to the difference between  
               the amount of disability-based income and $225.
                  
              If the family's disability-based unearned income exceeds $225
           
             a)   All of the first $225 in disability-based unearned  








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               income.

             b)   Fifty percent of all earned income.  (WIC 11451.5)



          FISCAL EFFECT:  Unknown.





          COMMENTS:


          CalWORKs:  The CalWORKs program provides monthly income  
          assistance and employment-related services aimed at moving  
          children out of poverty and helping families meet basic needs.   
          Federal funding for CalWORKs comes from the TANF block grant.   
          The average 2016-17 monthly cash grant for a family of three on  
          CalWORKs (one parent and two children) is $497.35, and the  
          maximum monthly grant amount for a family of three, if the  
          family has no other income and lives in a high-cost county, is  
          $704.  According to recent data from the California Department  
          of Social Services, around 497,000 families rely on CalWORKs,  
          including over one million children.  Nearly 60% of cases  
          include children under 6 years old.

          Maximum grant amounts in high-cost counties of $704 per month  
          for a family of three, with no other income, means $23.46 per  
          day, per family, or $7.82 per family member, per day to meet  
          basic needs, including rent, clothing, utility bills, food, and  
          anything else a family needs to ensure children can be cared for  
          at home and safely remain with their families.  This grant  
          amount puts the annual household income at $8,448 per year, or  
          42% of poverty.  Federal Poverty Guidelines for 2016 show that  
          100% of poverty for a family of three is $20,160 per year.  

          Welfare-to-Work requirements:  Welfare-to-work activities within  








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          the CalWORKs program include public or private sector subsidized  
          or unsubsidized employment; on-the-job training; community  
          service; secondary school, adult basic education and vocational  
          education and training when the education is needed for the  
          recipient to become employed; specific mental health, substance  
          abuse, or domestic violence services if they are necessary to  
          obtain or retain employment; and a number of other activities  
          necessary to assist a recipient in obtaining unsubsidized  
          employment.  

          Unless they are exempt, single parent adults must participate  
          for at least 30 hours per week in welfare-to-work activities,  
          whereas the minimum participation requirement for two-parent  
          families is 35 hours per week.  After receiving aid for up to a  
          maximum of 24 months, adults without an exemption must meet  
          federal work requirements, with more restrictive employment  
          settings and allowable employment activities.  If a CalWORKs  
          recipient who is not exempt from participation does not meet his  
          or her welfare-to-work requirements, the recipient is sanctioned  
          for noncompliance, and that recipient's portion of the family's  
          grant subtracted from the amount provided to the family to meet  
          basic needs.

          CalWORKs time limits:  Passage of the Personal Responsibility  
          and Work Opportunity Reconciliation Act of 1996 (PRWORA), which  
          was the final piece of federal welfare reform legislation,  
          marked the end of the previous Aid to Families with Dependent  
          Children (AFDC) program and the beginning of the block-granted  
          TANF program, under which CalWORKs was established in California  
          state law.  Among the numerous programmatic changes included  
          within the TANF program was a requirement that eligible parents  
          work or participate in work training or other activities that  
          lead to employment.  The TANF program provides a great deal of  
          flexibility in how states implement their respective programs,  
          including the ability for states to establish more truncated  
          time limits than the 60-month lifetime limit on aid for adult  
          recipients authorized within it.  As of 2011, California has  
          limited aid to adult CalWORKs recipients to a lifetime limit of  
          48 months.








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          Earned Income Disregard (EID):  While the maximum CalWORKs grant  
          amounts for high-cost counties and low-cost counties are $704  
          and $670, respectively, the average monthly grant amount across  
          the state is much lower at $497 per month, as it reflects a  
          reduction in the maximum grant due to other income in a  
          recipient family's household.  By allowing a certain amount of  
          income to be retained and excluded from grant calculations, the  
          EID plays a major role in facilitating and encouraging paid  
          employment.  


          Among adults who are living with their families in poverty and  
          applying for CalWORKs assistance due to unemployment or  
          underemployment, the EID also facilitates working adults'  
          ability to work more hours and seek higher wages that don't  
          fully offset the grant amount they could otherwise receive  
          without any income.  Under current law, the first $225 of an  
          adult recipient's gross earned income is disregarded from  
          CalWORKs grant calculations, then 50% of the remaining income is  
          disregarded, with the other 50% constituting the first portion  
          of what would otherwise be the recipient's grant amount based on  
          the maximum amount allowed.  For example, a recipient with a  
          monthly income of $700 will have the first $225 disregarded,  
          leaving $475 from which another 50% will be disregarded.  This  
          will leave $237.50 in income that will be counted when  
          calculating the family's grant amount; the grant amount in a  
          high-cost county would be $466.50 ($704 - $237.50), and the  
          grant in a low-cost county would be $432.50 ($670 - $237.50). 


          Need for this bill:  During the Great Recession, the Legislature  
          enacted a number of cuts to the state's safety net programs,  
          including CalWORKs grant reductions and reductions in the EID.   
          The 2011 Human Services Budget Trailer Bill, SB 72 (Chapter 8,  
          Statutes of 2011), reduced the EID to $112 plus 50% of the  
          remaining earned income, causing more of a family's monthly  
          income to count against the maximum grant amount and thereby  
          reducing a family's total monthly income.  A year later, when  








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          numerous other changes were enacted within the CalWORKs program,  
          the EID was restored to the first $225 and 50% of remaining  
          countable income.  The author of this bill is seeking to  
          continue the trend of increasing the EID in order to facilitate  
          families' ability to increase earnings and build financial  
          stability as they participate in education programs and  
          transition to work.


          SB 1041 (Committee on Budget and Fiscal Review) Chapter 47,  
          Statutes of 2012, which was the Budget Act trailer bill that  
          restored the EID, was also the trailer bill that created the  
          Welfare-to-Work 24-Month Time Clock, thereby requiring aided  
          adults, once the 24 months of increased flexibility in required  
          activities runs out, to meet federal work requirements, with  
          more restrictive employment settings and allowable employment  
          activities, in order to continue to receive aid and services.   
          While this bill will not abolish this requirement, it does seek  
          to provide adults expanded opportunities to transition to  
          employment and better support their families by increasing the  
          overall maximum time on CalWORKs aid to the 60 months allowed by  
          the federal TANF program.


          The author states: "According to the Federal Supplemental  
          Poverty Measure, nearly a quarter of Californians live in  
          poverty.  While California as a whole has recovered from the  
          Great Recession, the recovery has been uneven, and many  
          impoverished Californians continue to struggle.  According to  
          the Public Policy Institute of California, the 2014  
          post-recession poverty rate in the state was 16.4%, a 4%  
          increase from the prerecession levels of 2007.  Poverty,  
          particularly childhood poverty, results in a variety of negative  
          short- and long-term outcomes for families.  It is in the  
          state's interest to pursue a multi-pronged approach to reduce  
          poverty amongst Californians.  A restoration of the CalWORKs  
          lifetime limit to its pre-recession level and an EID increase  
          are necessary strategies to pursue in the fight against  
          poverty." 








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          REGISTERED SUPPORT / OPPOSITION:





          Support





          California Alternative Payment Program Association (CAPPA)


          California Association of Food Banks
          California Catholic Conference
          California Food Policy Advocates (CFPA)
          California Immigrant Policy Center (CIPC


          Children's Defense Fund - California 


          Coalition of California Welfare Rights Organizations, Inc.


          County Welfare Directors Association of CA (CWDA) 


          Courage Campaign 


          Ella Baker Center for Human Rights
          Hunger Action Los Angeles










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          National Association of Social Workers, CA Chapter (NASW-CA)


          Saint Anthony's Foundations
          Western Center on Law and Poverty - sponsor



          Opposition





          None on file.




          Analysis Prepared by:Myesha Jackson/Daphne Hunt / HUM. S. /  
          (916) 319-2089